Stocks look to follow world markets lower

@CNNMoneyInvest November 23, 2011: 9:06 AM ET
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NEW YORK (CNNMoney) -- U.S. stocks were poised to take cues from Asian markets Wednesday, after a preliminary report showed that Chinese manufacturing slowed sharply and amid ongoing eurozone fears.

The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were lower ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Ongoing rises in bond yields in Italy and Spain have continued to shake investor confidence.

The European Commission published a green paper on stability bonds Wednesday, outlining proposals to fix the eurozone's debt crisis. However, skepticism remains about how effective these plans will be.

Investors are also worried that a slump in Chinese manufacturing could mean that the eurozone's problems are spreading beyond Europe.

"Asia remains unable to disconnect itself from European woes, and the contagion is evident in the latest China HSBC PMI reading in November, which collapsed below the boom/bust mark of 50," BNP Paribas said in a research note.

Stocks ended in the red Tuesday amid worries about U.S. economic growth, though losses were trimmed after the International Monetary Fund unveiled an beefed-up lending program to help otherwise healthy countries with short-term financing problems.

IMF broadens lending power

The program could target, for example, European countries that have so far been bystanders in the continent's debt crisis. The IMF said it would be used "as insurance against future shocks," and to help "break the chains of contagion."

World markets: European stocks were mixed in morning trading. Britain's FTSE 100 (UKX) slipped 0.7%, the DAX (DAX) in Germany added 0.2% and France's CAC 40 (CAC40) slid 0.5%.

Asian markets ended in the red, after a preliminary report from HSBC Wednesday showed that Chinese manufacturing output dropped the most since March 2009 in November. The report is published a week before official data is released.

The Shanghai Composite (SHCOMP) ended the session 0.7% lower and the Hang Seng (HSI) in Hong Kong tumbled 2.1%. Japanese markets were closed Wednesday for holiday.

Economy: The government released several economic reports Wednesday including jobless claims, personal spending and income, and durable goods.

The number of people filing for initial unemployment benefits rose 2,000 in the latest week to 393,000. Analysts surveyed by Briefing.com expected 391,000 jobless claims for the week ending November 19.

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Personal income climbed 0.4% in October, while personal spending grew 0.1%. Analysts had expected both measures to rise 0.3%.

Meanwhile, orders of durable goods slipped 0.7% in October -- slightly less than the 0.9% drop economists had been expecting.

Companies: John Deere (DE, Fortune 500) reported full-year earnings hit a record $2.8 billion on Wednesday, and posted fourth-quarter net income that blew past expectations. Shares of the equipment maker climbed 6%.

Shares of Yingli Green Energy (YGE) edged up 1% in premarket trading, after the solar energy provider posted a third-quarter loss, but said shipments jumped 22% during the quarter.

Netflix (NFLX) announced Tuesday that it expects to be unprofitable in 2012, saying that it will sell $400 million in common stock and convertible notes. Shares of the video-streaming subscription service slipped more than 1% in early trading Wednesday.

Bank of America (BAC, Fortune 500) shares slid 2% in premarket trading Wednesday, after hovering near a 2-year-low Tuesday, after a report in The Wall Street Journal stated the bank was having difficulty meeting U.S. financial regulatory requirements.

Late Tuesday, the Federal Reserve ordered the top 31 U.S. banks -- with assets of $50 billion or more -- to participate in stress tests that will simulate another financial crisis.

Tests will simulate a more severe global financial meltdown for six banks with the largest trading operations: Bank of America, Goldman Sachs (GS, Fortune 500), Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Morgan Stanley (MS, Fortune 500) and Wells Fargo (WFC, Fortune 500).

Shares of JPMorgan Chase and Citi fell 1% in premarket trading.

Currencies and commodities: The dollar gained against the euro, the British pound and the Japanese yen.

Oil for January delivery slipped $1.73 to $96.28 a barrel.

Gold futures for December delivery fell $10.20 to $1,692.20 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down to 1.92% from 1.94% late Tuesday.  To top of page

Index Last Change % Change
Dow 30,932.37 -469.64 -1.50%
Nasdaq 13,192.34 72.91 0.56%
S&P 500 3,811.15 -18.19 -0.48%
Treasuries 1.46 -0.06 -3.82%
Data as of 8:35pm ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
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15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
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